Any real estate agents with at least 20 transactions under their belt can tell you that a seller’s market is no guarantee that a home will sell. As an example, in the last six months, 73 residential listings with Golden addresses either expired or were withdrawn from the MLS without selling. In those same six months, 481 listings sold. So, it can be said that 13% of listings did not sell despite a hot seller’s market. Why?
The median price of those unsold listings (after reductions) was $580,000. The median days on market was 38. Ten were on the market over six months. About half of them reduced their listing prices before giving up. The other half held firm at their original listing price.
Usually the reason a home does not sell is because of price, and it is so tempting when sellers are seeing homes sell quickly and above listing price to insist that their homes should be listed for more than comparable sales suggest — or than their listing agents recommend.
As I have written many times in this column, it is so much smarter in a hot market to price a home low instead of high. One column headline from several months ago read, “You Can’t Underprice a Home in This Market, But You Can Overprice It,” and I stand by that statement even more now than when I wrote it.
If you “underprice” a home, you’ll more likely attract multiple buyers who will drive the selling price (with proper management by your listing agent) to a price higher than you’d get if you had listed for that higher price.
On the other hand, if you overprice a home, it can sit on the market for weeks, whereupon if you lower the price it appears “stale” to prospective buyers. The notion that you only get one chance to make a first impression is as true with home listings as it is in your private or professional life.
If you do find it necessary to lower a price, it is best to do it quickly — within a week, for example — instead of after a lengthy period of not attracting any offers.
Another dynamic to be aware of is that “buyer’s remorse” is more common in a seller’s market . That’s because many buyers act too quickly to get a listing under contract, only to realize that the house isn't quite right for them. When this happens, the house goes back on the market. To forestall this, my practice is to carefully vet the winning bidder to assess whether this home truly meets their wants and needs.